IFDE 2009 - Presentation Ace Global - PDF

8/14/2019 IFDE 2009 - Presentation Ace Global - PDF

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FOOD AND WINE SECTOR IN INDI


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Presentation for Italian Delegation a

IFDE INDIA 2009

Ace Global P2 December 2009

On behalf of


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INDIA an overview


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Geography

Total Area : 3.28 million sq km

Land Boundaries : 14,103 km

Coast Line : 7,000 km

29 States & 6 Union Territories

Population & Demographics

1.17 billion people

Population growth rate : 1.548%

31.5% population are under the age of 15yrs., 63.3% between 15-64 yrs.

National Language : Hindi, spoken by 33%population; 14 officially recognizedlanguages

English: widely used in business and

everyday life

Literacy: overall 59.5%; male: 70.2%;female: 48.3%

A Brief Profile


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Main Cities

Delhi: Seat of Government and Important BusinessCentre

Mumbai: Commercial centre, fashion and film City

Chennai: Commercial capital of south India

Bangalore & Hyderabad : Major IT Hubs

Kolkata: Industrial and Commercial centre, a keytrading port of East Asia

Income distribution

Per capita income in 2008-09 - Rs 31

Wealthiest cities: Mumbai, Delhi, Koand Hyderabad / Bangalore

150,000 households with annual inco

25% of population is below poverty lin

Economy

GDP growth average 8.8% in the past five yearsfrom 2003-04 to 2007-08 (over 6% in 2008-09)

Increasing importance of trade and external capitalinflows. The share of merchandise trade to GDP

increased to over 35% in 2007-08 from 23.7% in2003-04.

The 11th plan (2007-12) targets 8-10% growth forIndian economy.

Business Environment

Fairly open business regulatory envirliberalized Trade and Investment poli

According to latest World Bank reportBusiness with India 2009, it is easier business in India now, than it was thr

Import tariffs still high but being progrreduced to ASEAN levels

Well laid legal systems/ processes, thoverloaded and slow


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In spite of the Global slowdown, the Economy is expected togrow at a modest 6.5 % & 6.7%during FY 09 & FY 10

Source: RBI Statistics

Current PeriodPost Reform PeriodPre Reform Period

Economic Outlook


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The India Opportunity


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Why India Stable 6-8% economic growth, led by private sector- amon

growing economies, steady economic reforms A continent-sized market, driven by rising disposable incom

Increasingly open market for international goods, with steadreducing tariffs

Sector on a high growth path

Brand ITALY is already well established and accepted in Imany sectors

Liberal trade and investment policies allow flexibility in busi

structure (subsidiary, joint venture, branch office, liaison off


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52% cultivable landcompared to 11%world average

All 15 major

climates in theworld exist in India

46 out of 60 soil

types exist in India

20 agri-climaticregions

Largest livestockpopulation

Largest producer ofmilk

Largest producer

cereals

Second-largest fruitand vegetable

producer

Among the top five producers worldwideof rice, wheat, groundnuts, tea, coffee,tobacco, spices, sugar and oilseeds.

Sunshine hours andday length ideallysuited for round the

year cultivation

Signific

India ahub


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F d P i


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Food Processing

Potential for investment and growth in key segments

Vision 2015 Processing of perishables to be increased from 6% to 20% (10%

Value addition to be increased from 20% to 36%

Share in world trade to be increased from 1.7% to 3%

Emerging Middle Class


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101.1

91.3

10.9

2.4

1.2

74.1

106

55.1

5.5

3.3

11.4

3.8

14.6

15.2

3.8

6.3

Householdincome brackets

2005 2015

Number of Households, (in million)

Aggregate disposable income2000 (in INR trillion)

Definition of household income brackets based on annual household income: Globals (more than INR 1,000,000), Strivers (INRSeekers (200,000 to 500,000), Aspirers (90,000 to 200,000), Deprived (less than 90,000)

Middle Class

Emerging Middle Class

S i k f


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Some important market features In many products, the rural market is bigger than the urba

in volumes

As per a survey by AC Nielsen in 28 countries

Urban Indians are among the top 10 most-frequent consumers of faacross the globe

71% of urban Indians consume food from take-away restaurants on

37% do so at least once a week.

Highly price-sensitive market

Incumbency factors are strong, and consumers do not sw

very easily

Expenditure on Food


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Expenditure on Food

Food and Grocery accounts for 57% of consumers totalexpenditure


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Import Policy contd


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Import Policy contd.

Packing & Labeling: All imported packaged commodities

carry the following declarations: Country of origin

Name and address of the importer

Generic or common name of the commodity

Net quantity (using Indian standard units of weights and me

Month and year of manufacture, packing, or import Maximum Retail Price for the ultimate consumer

Import Duties


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Import Duties

Total EffectiveDuty

Wine 140% to 250

Olive Oil 7.73% - 12.03

Pasta 36.14%- 47.61Cheese 36.14

Sugar Confectionery 41.87

Baked Products (Bread, Pastry, Cakes,Biscuits)

36.14% - 47.61

Coffee 111.12

S b S f


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Sub-Sectors of

Interest

Wines


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Wines

Demand in India - 1.2 million cases (12 bottles of 750 mRs. 3 billion

Growth 25% per year over the last three years.

Projected growth of 25% up to 2015

Wine Imports in 2008-09 Value about 12 million Euros

Italys share 13% (France - 37% ; Australia 15%)

Quantity ~200,000 cases (75% increase over previous year

Wines contd


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Wines contd.

Per capita consumption about 9 ml (400 ml in China, 30

80% of wine sales are in the major cities - New Delhi, M

Chennai, Kolkata, Pune and Bangalore West India accounts for over 41% of total volume sales o

India, followed by North India (29%)

Nearly 90% of wine sales are for still (red and white) winSparkling and Ros wines target select segments of paraffluent consumers.

About two-thirds of the volume sales are through off-trad 5 star hotels, pubs and bar-restaurants

Wines contd


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Wines contd.

Incentives offered by state governments (Maharashtra)

Excise holiday for wine makers till 2011, sales tax concessi

license fees for ten years Two wine parks established, one Godawari Wine Parkat V

Nashik and Krishna Wine Parkat Palus, Sangli

Grape Processing and Research Institute(GPRI) establishe Retail

Some states (Maharashtra, Haryana) are considering a new

policy to liberalize retail of wine and beer through large depstores and other selected retail outlets.

Wine major Chateau Indage plans to open more than 1,000

wine retail in India

Olive Oil


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Market size 4,500 MT in 2008-09 About 60% for edible use

Growth about 30 - 40% per year

Imports in 2008-09

Virgin olive oil 630 MT

Italys share 53%

Other grades 2200 MT

Italys share 36% (Spain 56%)

Spanish and Italian brands are most popular (~ 90% market

Olive Oil

Olive Oil contd


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Olive Oil ..contd.

Seasonal demand peak during winter months, droppin

40% during summers Mumbai is the largest consuming centre (30%), followed

(20%).

Available on up-market shelves for over a decade

Well accepted for medicinal and cosmetics uses.

As a food ingredient, usage restricted to seasoning of paor adding a dash of olive oil to perk up a salad.

International Olive Council has launched an India focusefor promoting use of olive oil and table olives as a mediucookin for Indian food 1 million Euros for three ears

Pasta


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Pasta

Pasta remains an urban product in India with niche dem

Total consumption around 9000 ~ 9500 MT

Growth 14%

Pasta imports about 1,940 tons in 2008-09

increase 70% over previous year Italys share 33%

10 pasta brands are available in the market (leading brand

Remo 125 tons, and Barilla 250 to 300 tons) Wheat & vegetarian pasta preferred

Leading Indian brands are Bambino Agro and Sunfeast

No significant market for canned, chilled pasta

Cheese


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Cheese

Market size of organized cheese industry

50 million Euros

Over 8000 tons. (~1% of total dairy production) Industry growth rate about 10%-12% per year (volume) a

per year (value)

Household penetration of branded cheese is about 5%

60% of the market is for processed cheese, 30% by cheeand the remaining 10% by flavoured /specialty cheese

Main consumption centres: Mumbai (30%), Delhi (20%), (6%), Kolkata (7%)

Cheese contd


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Top players in branded cheese in India - Amul, Britannia

Mother Dairy. Of these, Amul has a market share of 65% Imported cheese has a 7.5% market share (about 600 M

overall cheese market, which is dominated by local bran

Imported brands Kraft of Australia, Remia of Holland e

Italys share in imports about 6% (2008-09)

Cheese . contd.

Bakery products


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About 1 billion Euro industry

Projected growth of 8% per year - driven by changing life style

urbanization and increased awareness on healthy and safe foo High degree of fragmentation, large presence of informal secto

The market share is about 22.5% (rural) and 77.5% (urban) in

With an estimated size of 25 million Euros, the bakery machineexpected to witness a growth of 50% in the next two-three yea

Scope for imports of high quality and specialty ingredients for t Bread and Biscuits account for about 82% of the market

only 35% is in the organized sector

Bakery products

Bakery products Contd


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Bakery products Contd

Bread

Market size - 1.5 million MT (Production capacity 2.7 million MT)

Puratos of Belgium, has launched wellness and health breads, inclubread

Biscuits

Market size - 1.1 million MT

Growth rates between 13 and 17% per year from 2003 to 2007/08

About150 organized players - mainly small and medium companies

The unpackaged biscuits market is valued at US$ 414 million with a5%,

Cakes and Pastries market valued at about 150 million Euro

million Euros respectively growing at 10% (CAGR)

Dairy sector


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Dairy sector

The current size of the Indian dairy sector is 45 billion Eu

The sector has been growing at a rate of 15% a year, slatouch 75 billion Euros by 2011

The dairy exports in 2007-08 rose to US$ 210.50 million

US$ 113.57 million in the previous year

Milk and milk products contribute to a significant 17% of tcountrys total expenditure on food

Ice Cream


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Market size about Rs 20 billion

Branded market about 40% by value; 100 million litres by volume

Leading players Amul (38%), Kwality Walls (14%), Vadilal (12%), Mo Vanilla, Strawberry and Chocolate flavours constitute approximate

market.

Growing at 12% per year Per capita consumption 300 ml per year (World average 2.3

Challenges

Competition from other desserts and cold beverages

Distribution network and cold chain infrastructure

Ice Cream

Snacks and Confectionery


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Snacks and Confectionery

Market size about 2 billion Euros

Organised sector share is only about 45-50%

Growing at 15-20% a year (unorganized sector 7-8%)

Snacks segment - largely dominated by potato chips and potatproducts with over 85% share of the salty snack market.

Confectionery market - 400 million Euros Sugar confectionery accounts for 60% of the market

Balance made up of chocolates, mints and gums

Growing at over 6 % annually over the last five years

The gum-based confectionery segment has grown even faster at over 1

Coffee


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Co ee

India has a 4% market share in the total world output of

Total production - 262,000 MT

Domestic consumption - 94,400 MT (about one-third)

Exports - 219,583 MT in 2008-09

Italy, Germany and Russia are the top three buyers of Indian co

Organized coffee retail business Rs 800 million

growing at 25%-30%

Potential for nearly 3,000 additional outlets

India's coffee consumption is projected to double in the next

Ready to Eat (RTE) Foods


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y ( )

RTE Food market estimated around 10 million Euros in 2007

fastest growing category (CAGR 73%) in packaged foods

Canned/Preserved foods are more popular, contributing to app90% of the market and growing at a CAGR of 63%

The Chilled and Dried ready meal segments are very small

Growth restricted due to consumer preference for fresh and homfood.


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Doing Business in India

Options for Business presence in Ind


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p p

As a foreign company through a Liaison Office/Representative Office (no business activity)

Project Office (to execute a project of an Indian company)

Branch Office (specified activities only. No manufacturing, pactivities directly/indirectly)

Technical Collaboration

Direct Sale As an Indian company through a

Joint Venture (including takeover / strategic alliances)

Wholly Owned Subsidiary

Key Factors for Success


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y

Deal with India on its own terms, dont clomodels

India is poly cultural; each region is different. Invest long term. Be prepared to burn your brid

Be willing to Indianize. Product customization (e.g. Dabon paneer)

Advertising and promotion

Distribution network and supply chain

Brand building is important


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WELCOME TO INDIA


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Thank you

Ace Global Private LimitedD-139, East of Kailash

New Delhi 110065, [email protected]
mailto:[email protected]:[email protected]

IFDE 2009 - Presentation Ace Global - PDF

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